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FT: Life after Wall Street

February 18, 2012 Leave a comment Go to comments

A very interesting article adapted from the Financial Times
By William D. Cohan

Some 40,000 high-level bankers lost their jobs in the financial crisis. But questions on what the former Masters of the Universe did next are met with impenetrable silence

When it comes to publicity, investment bankers are a notoriously fickle bunch. When it suits them – for instance, to boast about a game-changing M&A deal or to pump up a hot IPO – bankers are more than happy to be quoted by name, rank and serial number. But when it comes to addressing more difficult topics – the role bankers and traders played in the current financial crisis, why the world needed synthetic collateralised debt obligations in the first place or why they get paid so much – they scurry away faster than a cockroach when the light goes on in a darkened room.

Part of this behaviour is genetic. One of the supposed Wall Street truisms is that the great firms stay out of the limelight and shun press inquiries. They would prefer that their clients get the publicity, not them. This is, of course, a fabulous myth. The mass that has been written about Wall Street over the past decades confirms that the opposite is clearly the case. Still, Wall Street banks do all they can to drum into their employees the importance of not talking to the press – at least if they want to keep their jobs. The dictum of omertà is so powerfully reinforced that even after bankers and traders are no longer employed on Wall Street, many still stick to the party line (often sealed by contractual obligations not to discuss publicly their former employer).

For most of its 143 years, Goldman Sachs didn’t even have anyone on staff to handle its press relations. When the firm eventually hired Ed Novotny, in 1970, he worked from his apartment at Tudor Towers, on the east side of Manhattan. Novotny’s aggressively vacuous public-relations efforts became part of the Goldmans legend. Novotny, explained a former Goldmans executive, had “this incredible paranoia”, where “the firm would never go on the record”. If Novotny told a reporter something, it would always be on “deep, deep, deep, deep, deep – five ‘deeps’ in a row – background”, the former Goldmans executive said. “Every time he would describe a reporter to me it would be he or she ‘is very, very, very dangerous’. Even Bill Cunningham, the society photographer, was ‘very, very, very dangerous. So watch it.’”

On the rare occasions when an investment banker mistakes his or her own prowess for that of his or her firm and dares speak of it – as, in The Wall Street Journal, did both Erin Callan, the short-lived chief financial officer ofLehman Brothers, and Mark Maybell, the former head of media and telecoms banking at Merrill Lynch (who had the audacity to trumpet his $5m annual compensation package) – the fallout can be swift and thorough. Not for nothing did Voltaire write, in Candide, of how the British executed one of their own admirals who lost an important battle “pour encourager les autres”. It is a powerful message, especially on Wall Street. Which is why it is difficult to write the very important story of how Wall Street bankers and traders cope with losing their highly paid jobs, after being summarily fired, often with surprisingly little in the way of severance or explanation, other than the perfunctory “reduction-in-force” statement from the HR department. For these and other reasons, former Wall Streeters don’t like much to talk to reporters about how difficult it is for them to be sidelined.

There are no easy ways to extract from them how it feels to go from having a power office in a high-rise corporate tower in New York or London, working on tense but important billion-dollar M&A deals and expecting millions of dollars in a bonus, to being at home in a leafy New Jersey suburb with nothing to do but think about heading to the gym or driving their kids to school along with other dispossessed dads or worse, a bunch of “soccer moms”. What this kind of rejection – often for no reason other than business has turned sour – does to one’s feeling of self-worth, ego and familial relations is not something they are eager to discuss publicly.

I know these feelings of dislocation, shame and inadequacy intimately. After a 17-year career on Wall Street – where I rose to be head of the highly regarded media and telecoms M&A business at JPMorgan Chase before being slowly stripped of my responsibilities after September 11 – the bank dismissed me in January 2004 as part of an ongoing “reduction in force”. Despite two graduate degrees from an Ivy League university and years of exponentially increasing remuneration, I was left in the unenviable position of caring for a wife and two small children with no hope of finding anything like the work I had been doing at the pay I had been receiving. In the months after my firing, nasty nightmares often startled me awake. Out of desperation and a lingering desire to fulfil my original dream to be a journalist, I began writing my first book – The Last Tycoons: The Secret History of Lazard Frères & Co.

I understand well why Mark Barber, a former managing director of the technology banking group at Citigroup, would not want to share with me his feelings after losing his job, just weeks before Christmas, after 14 years at the firm and at its predecessor, Salomon Brothers. Reached on his mobile phone, Barber didn’t feel like talking. “My knee-jerk reaction is not to make this any more public than it needs to be,” he said. “At this juncture, I don’t feel comfortable speaking about it.” Before he hung up the phone, he noted that he is “in the process of considering my options”.

Egan Antill, who was recently promoted to a managing director at Merrill Lynch (in metals and mining banking) after joining from Lazard in 2006, left Merrill (now part of Bank of America) in September. “I’d rather not get into it,” he said when I spoke to him by phone. Sean Murtagh had been a third-year associate at Goldman Sachs, in the firm’s consumer retail group, before leaving his job in October 2011. “I can’t talk about anything on that matter right now,” he explained, graciously. “But I appreciate the call.”

Other former Wall Streeters toyed with the idea of sharing their stories, before confessing that being mentioned in an article about life post-Wall Street was not the kind of publicity they were seeking either.

If we could only break down the seemingly impenetrable wall of silence that surrounds former Masters of the Universe, we might – finally – begin to understand better the system and culture which they created and perpetuated, and which has failed us so miserably.

The full article is available at the link – http://www.ft.com/cms/s/2/0dd03ed8-5852-11e1-ae89-00144feabdc0.html

William D. Cohan is the author of ‘Money & Power: How Goldman Sachs Came to Rule the World’ and two other books about Wall Street. His first book, ‘The Last Tycoons’, won the 2007 FT/Goldman Sachs Business Book of the Year award.

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